On a bad day for Saudi banks, a trio of lenders in the kingdom announced disappointing earnings.
Saudi banks' earnings disappoint
It was a bad day for Saudi banks yesterday, as a trio of lenders in the kingdom announced disappointing earnings. Those results followed similarly unimpressive reports by two other Saudi banks on Tuesday. Samba Financial Group, Saudi Arabia's second-largest lender by market value, posted an 8.8 per cent drop in third-quarter net profit after a decline in lending income.
The bank made 1.1 billion Saudi riyals in the three months to the end of last month, compared with 1.21bn riyals in the same period last year, the bank said. The earnings came below the average analyst forecast for a quarterly net profit of 1.2bn riyals. Riyad Bank posted a 19.5 per cent fall in third-quarter net profit. The lender made 611 million riyals in the three months to September 30, compared with 759m riyals in the same period last year, it said in a statement posted on the bourse website. The earnings were well below the average forecast of 756.1m riyals in a Reuters survey.
The bank blamed a "conservative policy" for the profit fall, hinting at higher provisions. It gave no details. Finally, Banque Saudi Fransi, also one of Saudi Arabia's five biggest banks by market value, posted a 13 per cent drop in third-quarter net profit. The lender made 621m riyals in the quarter, compared with 714m riyals for the same three months last year, it said. Analysts had expected 755.1m riyals on average. All three banks reported results after the close of trading yesterday.
The Tadawul All-Share Index fell 0.7 per cent to 6,303 points, after trading was halted for an hour due to technical difficulties. It was the third day in a row the index declined. "Third-quarter earning of banks have been disappointing, which has made investors cautious. Most are waiting for third-quarter earnings reports of big companies like SABIC," said Hesham Tuffaha, the head of research at Bakheet Investment Group.
* with Reuters